"a growing share of what shows up as manufacturing value added in national statistics is in fact services – either research and design or post-production services..."
Could be just a disposition of the national income bean counters to count intermediate production "services" as final consumption "goods". Simon Kuznets would not approve.

I gave a talk yesterday on New Growth Strategies at the World Bank, which was more or less an elaboration of this short piece. I argued that industrialization had pretty much run out of steam as a growth strategy, that services would need to be the focus going forward, and that this required in ...

"Gloomy European Economist" Francesco Saraceno on Portugal: The Commission on Portugal: Is This for Real?: A quick note on Portugal. Let’s start from three facts: Austerity did not work. Portugal is in a recessionary cycle. The economy will shrink by 2.3 per cent this year, more than twice a...

"Gloomy European Economist" Francesco Saraceno on Portugal: The Commission on Portugal: Is This for Real?: A quick note on Portugal. Let’s start from three facts: Austerity did not work. Portugal is in a recessionary cycle. The economy will shrink by 2.3 per cent this year, more than twice a...

"Gloomy European Economist" Francesco Saraceno on Portugal: The Commission on Portugal: Is This for Real?: A quick note on Portugal. Let’s start from three facts: Austerity did not work. Portugal is in a recessionary cycle. The economy will shrink by 2.3 per cent this year, more than twice a...

Dean Baker issues a warning: Consumer Confidence Index (the one that matters) Declines: The Conference Board's index of consumer confidence fell in March. What is noteworthy for those following the economy is that the current conditions index dropped by 3.5 points to 57.9. This component is th...

Glad to see someone (Josh Barro) trying to counter the latest nonsense from George Shultz, Gary Becker, Michael Boskin, John Cogan, Allan Meltzer, and John Taylor: For 'Faster Growth,' Soak the Poor?, by By Josh Barro: This weekend, the Wall Street Journal assembled a redoubtable list of conse...

Dorning Rasbotham, Esq., was a friend of the poor. Nay, from the bottom of his heart, he was a friend of the poor! He felt tenderly for the poor man and his family. After all, what would become of the rich if there were no poor people to till their fields, pay their rents and manufacture their goods?
The Moon Belongs to Everyone:
http://econospeak.blogspot.com/2013/03/the-moon-belongs-to-everyone.html

Glad to see someone (Josh Barro) trying to counter the latest nonsense from George Shultz, Gary Becker, Michael Boskin, John Cogan, Allan Meltzer, and John Taylor: For 'Faster Growth,' Soak the Poor?, by By Josh Barro: This weekend, the Wall Street Journal assembled a redoubtable list of conse...

Via Henry Farrell: Did the Iraq War Cause the Great Recession?, Henry Farrell: Thomas Oatley thinks that it very plausibly did. His argument draws upon an interesting article (should be ungated) in the new issue of Perspectives on Politics, where he, Kindred Winecoff, Andrew Pennock and Sarah...

When will we ever learn?: Marches of Folly, by Paul Krugman, Commentary, NY Times: Ten years ago, America invaded Iraq... Some voices warned that we were making a terrible mistake... And those warnings were, of course, right. ... So did our political elite and our news media learn from this ex...

Original sin. Case in point, Bryan Caplan who admits, "The minimum wage is far from the most harmful regulation on the books. Why then do I make such a big deal about it? Because it is a symbol of larger evils."
http://econlog.econlib.org/archives/2013/03/the_vice_of_sel.html#254425
Get it? The "system of natural liberty" is the Garden of Eden. Did you think Adam Smith's first name was a coincidence? Minimum wage is the apple. The Invisible Hand says don't eat it. Satan, the snake, the state -- they all begin with an "s". Did you think that was a coincidence too?

Yesterday Arin Dube gave a testimony at the Senate HELP committee hearing on minimum wage and indexation. His written testimony is almost 20 pages long, but the one page executive summary included below notes the key points on inequality, employment, turnover and frictions, prices, poverty, and ...

Yesterday Arin Dube gave a testimony at the Senate HELP committee hearing on minimum wage and indexation. His written testimony is almost 20 pages long, but the one page executive summary included below notes the key points on inequality, employment, turnover and frictions, prices, poverty, and ...

Mike Konczal: ... When I read people like Sachs, I too notice four crude elements that stand out, all of which are significant problems for a story of what has gone wrong in the Great Recession and what can be done about it. In short, there's (a) no theory of the business cycle and the Great ...

Mike Konczal: ... When I read people like Sachs, I too notice four crude elements that stand out, all of which are significant problems for a story of what has gone wrong in the Great Recession and what can be done about it. In short, there's (a) no theory of the business cycle and the Great ...

Daniel Hamermesh argues that innovation in economics is slowing, and that allows older economists to stay in the game longer than in the past: Ageing and productivity: Economists and others, by Daniel S. Hamermesh, Vox EU: Is economics still a young person’s game? If not, what is changing? Thi...

Ed Phelps does not like rational expectations: Expecting the Unexpected: An Interview With Edmund Phelps, by Caroline Baum, Commentary, Bloomberg: ...I talked with [Edmund Phelps] ... about his views on rational expectations... Q: So how did adaptive expectations morph into rational expectati...

A repeat from the past: Arguments for and against the use of machines: Leeds Woollen Workers Petition, 1786, Modern History Sourcebook: This petition by workers in Leeds (a major center of wool manufacture in Yorkshire) appeared in a local newspaper in 1786. They are complaining about the effe...

Testimony of Walter Reuther to the 1955 Joint Congressional Subcommittee Hearings on Automation and Technological Change (p. 124):
"Every tool on every operation has a green light, a yellow light, and a red light; and when all the green lights are on, it means that all the tools at each work station are operating up to standard. When a yellow light comes on, on tool No. 38, it means that the tool is still performing, but the tool is becoming fatigued and that is a warning sign, so that the operator sitting there looking at these panels will know that he has to get a replacement tool for tool No. 38. He stands by at that position on the automated machine, and at the point the red light would kick on, on the board, he walks over — the machine automatically stops — he puts the new tool in the place of the tool that is worn out, and automatically the green light comes on and the machine goes on.
"When I went through this plant the first time I was told by a top official of the Ford Motor Co.: 'Mr. Reuther, you are going to have trouble collecting union dues from all of these machines.'
"And I said: 'You know that is not bothering me. What is bothering me is that you are going to have more trouble selling them automobiles.' That is the real significance. We have mastered the know-how of mass production, and what we need to do is to develop comparable distribution know-how so that we will have markets for the tremendous volume of production that automation now makes possible."
That was 1955. We “solved” the distribution know-how problem with something called “credit” a.k.a. debt: credit card debt, mortgage debt, government fiscal policy. How is that distribution know-how solution working out for you? Meanwhile that tremendous volume of cars has contributed to a tremendous volume of carbon dioxide in the atmosphere leading to a tremendous volume of seawater lapping at the NYC and Jersey shores during Sandy.
In 1956, Time magazine published a report titled, "One Big Greenhouse" and the Nation published an essay by Kenneth Burke titled "Recipe for Prosperity: 'Borrow. Buy. Waste. Want.'" Those titles speak for themselves
http://ecologicalheadstand.blogspot.ca/2013/02/robots.html
See also Dorning Rasbotham (1780) "Thoughts on the Use of Machines in the Cotton Manufacture."
http://ecologicalheadstand.blogspot.ca/2011/11/moral-philosophers-stone-compleat.html

A repeat from the past: Arguments for and against the use of machines: Leeds Woollen Workers Petition, 1786, Modern History Sourcebook: This petition by workers in Leeds (a major center of wool manufacture in Yorkshire) appeared in a local newspaper in 1786. They are complaining about the effe...

Catherine Rampell: Are Immigrants Taking Your Job? A Primer, by Catherine Rampell: Immigration reform is back on the table, reviving debates about whether immigration is good or bad for American-born workers. There are a lot of competing studies (and pundits) out there, but the general takea...

Catherine Rampell: Are Immigrants Taking Your Job? A Primer, by Catherine Rampell: Immigration reform is back on the table, reviving debates about whether immigration is good or bad for American-born workers. There are a lot of competing studies (and pundits) out there, but the general takea...

Catherine Rampell: Are Immigrants Taking Your Job? A Primer, by Catherine Rampell: Immigration reform is back on the table, reviving debates about whether immigration is good or bad for American-born workers. There are a lot of competing studies (and pundits) out there, but the general takea...

Catherine Rampell: Are Immigrants Taking Your Job? A Primer, by Catherine Rampell: Immigration reform is back on the table, reviving debates about whether immigration is good or bad for American-born workers. There are a lot of competing studies (and pundits) out there, but the general takea...

"There is some disagreement about whether the wage benefits of immigration are evenly distributed among all workers."
That's just silly. Of course the wage benefits are not distributed evenly. Disagreement could only be about how uneven the benefits are and whether that uneven distribution of benefits (and/or costs) detracts from aggregate benefit.

Catherine Rampell: Are Immigrants Taking Your Job? A Primer, by Catherine Rampell: Immigration reform is back on the table, reviving debates about whether immigration is good or bad for American-born workers. There are a lot of competing studies (and pundits) out there, but the general takea...

I think of Robert Stavins as being on the optimistic side when it comes to action on climate change, but even he seems discouraged despite Obama's mention of this issue in his inaugural address: The Second Term of the Obama Administration, by Robert Stavins: In his inaugural address on January ...

"driving down american labor costs...
requires fake ecological prices...."
Yep. As long as economists insist on treating labor and the environment as separate "things" there's no possible solution to the problem because people keep asking the wrong questions. The antidote to "jobs vs. the environment" propaganda is "treating labor power as a common pool resource." Marx + Ostrom. Here's what Elinor Ostrom replied to me in 2010 on the question:
"had not thought about labor as a common pool that could be exhausted but now I see the similarity with resources."
Here's what Paul Burkett wrote in 1999:
"From the standpoint of the reproduction and development of society, labor power is a common pool resource – one with definite (albeit elastic) natural limits."
"In treating labor power as a common pool resource, Marx often draws a parallel between capital's extension of work time beyond the limits of human recuperative abilities, and capital's overstretching of the regenerative powers of the land."
"Marx treats a sustainable working day (one consistent with the day-to-day rejuvenation of the natural and social force of labor power) as a kind of public good. This jibes with Marx's recognition of labor power as a limited common pool resource from the standpoint of society's reproduction and development."
Got it? Labor power is a common pool resource. It's not a "lump" but neither is it "infinitely expandable" as neoclassical economics assumes. It's a resource "with definite (albeit elastic) natural limits."
But labor power is more that just another common pool resource among common pool resources. It is THE common pool resource that systematically relates to monetary exchange value and it is the ONLY common pool resource that can speak for itself.

I think of Robert Stavins as being on the optimistic side when it comes to action on climate change, but even he seems discouraged despite Obama's mention of this issue in his inaugural address: The Second Term of the Obama Administration, by Robert Stavins: In his inaugural address on January ...